Stocks Likely To Run Even Higher Before The Top Is In | New Harbor

At present, there are scant signs of an imminent reversal

The financial advisors from New Harbor Financial explain why the odds favor higher stock prices from here in the near term, to new all-time highs.

They also discuss the prospects for gold & the gold miners (both promising, especially the latter), the safety of T-bills, and what to do if you fear you may lose your job in 2025.

In their day-to-day duties of talking with regular investors just like you, these are the topics they’re getting asked about most right now.

To hear their answers, click here or on the video below:

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Adam’s Notes: New Harbor Financial (recorded 2.19.25)

EXECUTIVE SUMMARY:

• The stock market continues its strong upward trend, with the S&P 500 reaching new highs at 6,140 (yesterday). Despite concerns over high valuations, such as the Shiller PE ratio in the high 30s and the Buffett Indicator at unprecedented levels, New Harbor does not see imminent signs of a major market correction. However, they caution that historically, periods of extreme overvaluation have often led to sharp drawdowns, such as in 1929, 2000, and 2008, where market declines of 40% or more occurred. While the market may continue rising in the near term, conditions are ripe for volatility, and investors should remain cautious.

• Market participation was narrow at the end of 2024, with most gains concentrated in the "Magnificent 7" tech stocks. However, in early 2025, there has been a notable improvement in market breadth, with a wider range of sectors, including industrials, financials, and telecommunications, showing strength. The equal-weighted S&P 500 index, which gives the same weight to all stocks rather than being dominated by a few giants, has started performing in line with the cap-weighted index, suggesting healthier market dynamics. This shift may indicate that investors are becoming more optimistic about the broader economy and diversifying beyond mega-cap tech stocks.

• The recently released FOMC minutes from January suggest that inflation remains stickier than the Federal Reserve would like. The Fed’s discussion included the possibility of ending Quantitative Tightening (QT), which has been a key tool in withdrawing liquidity from markets. While Fed Chair Jerome Powell has signaled a cautious approach to rate cuts, New Harbor believes that